AI adoption is accelerating in automotive retail because leaders are seeing the value and benefits that stem from implementing the right solution. According to Cox Automotive’s Driving AI Readiness in Auto Retailing report, released October 2025, most dealers believe AI “is here to stay and is poised to positively impact their business.” What benefits does incorporating artificial intelligence into operations bring for these dealerships? This blog breaks down how AI can improve a car dealership across operations, profitability and the customer experience.
10 improvements that AI brings to automotive dealerships
The Cox Automotive survey mentioned above also notes that 63% of dealers say that investing in AI now is critical for long-term business success. This is likely because these dealers are witnessing the key benefits of artificial intelligence integration, including the ability to:
Reduce operational costs
One of the best opportunities for AI usage in automotive retail is automation that lowers expenses and manual workloads for employees and boosts efficiency. Examples of such automotion include routing calls, scheduling appointments and test drives, and conducting follow-ups through conversational AI. These uses have a beneficial impact on dealership margins and productivity.
How does AI decrease operational costs?
- Lower BDC expenses: AI handles repetitive BDC tasks, leading to cost savings from reducing overtime, call overflow or outsourcing.
- Improve employee efficiency: AI tools free staff to focus on high-value interactions. Faster call handling and response times also increase the number of repair orders and overall opportunities, making the dealership more profitable.
- Reduce staff burnout: Lighter workloads result in better morale and lower turnover. AI protects teams from peak-time surge stress.
Scale BDC operations
AI allows dealerships to handle more calls, inquiries and leads without additional headcount. With outbound campaigns using tools like STELLA Catalyst, an AI-powered engagement engine, dealerships move from reactive to proactive customer communication, seeing a significant lift in vehicles sold and cars serviced, without hiring more automotive BDC representatives or paying an external vendor for additional support.
Increase car sales
AI allows dealership sales teams to capture and nurture leads instantly. Response speed is pivotal when leads that are contacted within one hour are 60 times more likely to convert than those contacted after 24 hours, according to Mcomm Group. These faster follow-ups mean higher appointment set rates and more showroom traffic.
It’s estimated that dealerships lose out on 33% of calls, leaving money on the table.
AI offers 24/7 lead generation, capturing opportunities during and after business hours. Tools like STELLA answer dealership after-hours calls on the first ring, capturing leads that would have otherwise been lost.
Boost service department revenue
Dealer AI improves service scheduling and reduces phone bottlenecks, leading to higher appointment volume and increased repair orders (ROs). This brings in more revenue for your service drive, filling more service bays through consistent customer outreach. Because STELLA is programmed with service opcodes, the platform can accurately book appointments and prevent frustrating double bookings, ensuring the service department is running efficiently.
Improve dealership profitability
Automotive AI’s beauty is that it allows gains in sales, service and operational efficiency to compound. Dealers that have implemented AI are realizing ROI in less than three months, according to STELLA Automotive AI’s automotive survey conducted in the summer of 2025. Additionally, STELLA has generated over $36 million in revenue for dealerships over 90 days by JUST answering the phone.
Maximize marketing ROI
Dealership marketing managers can leverage AI to improve conversion rates from their outbound campaigns. Conversational AI engages the leads with faster responses, making them more likely to convert into sales. AI helps dealers achieve better results with their existing budgets and strategically reduces spend on underperforming campaigns.
Enhance customer experience
A 2025 Cox Automotive Service Industry Study found that nearly 45% of customers are dissatisfied with their dealership service experience, primarily due to unexpected costs and poor communication. Dealership CSI scores benefit when AI provides personalized, instant and accurate responses. Reduced wait times and friction create a more pleasant experience for customers, boosting CSI scores and loyalty. This is especially crucial at a time when, according to Cox Automotive, dealerships have lost 12% of service visits since 2018.
Streamline dealership operations
As STELLA CEO Rich Sands noted in a recent podcast, integrations are the backbone of effective voice AI for dealerships. This is an area where STELLA shines, with AI that unifies dealer systems, including CRMs, schedulers and DMS. This automation reduces errors and improves workflow clarity. It allows the AI digital assistant to recognize the customer who is calling, accessing their information to provide them personalized service.
Future-proof your dealership
As the Cox Automotive Service Industry Study notes, dealerships are losing both sales and service revenue to independent shops. It’s imperative that dealerships prepare themselves for an increasingly competitive market by future-proofing their operations with technology. Cox Automotive’s assessment is clear: “To regain loyalty, dealerships must embrace digital tools that simplify communication and offer modern conveniences.” AI helps you do exactly that by streamlining scheduling, automating follow-up, and creating consistent, seamless customer experiences that meet modern expectations. By adopting these tools now, dealers can stay resilient as consumer behavior continues to evolve.
Gain a competitive advantage
Dealerships that respond faster win more customers. AI gives you an edge by ensuring every lead is answered instantly, every call is handled efficiently and every customer receives accurate information the moment they need it. This speed and consistency translate into more appointments, higher satisfaction, and stronger loyalty. Differentiation in a crowded market comes from superior efficiency and CX, two areas where AI enables dealers to outperform competitors who still rely on slower, manual processes and offer poor lead response times.
Ready to experience how AI improves dealership performance across cost savings, revenue growth, customer experience, and efficiency? Adopt AI now to build a more resilient and profitable dealership model.
